According to the World Gold Council (WGC), Singapore’s central bank was the third-largest gold purchaser globally during the first nine months of 2023, behind its counterparts in China and Poland.
According to the council, the Monetary Authority of Singapore (MAS) increased its holdings of gold to 75 tonnes in 2023 by purchasing four tonnes on regulated gold markets in the third quarter of 2023.
The biggest purchaser, the People’s Bank of China, increased its holdings of the yellow metal by 78 tonnes in the third quarter.
China’s central bank has added 181 tonnes of gold to its stockpiles since the beginning of 2023, bringing them to 2,192 tonnes, or 4% of its total reserves.
Additionally, the National Bank of Poland kept up its gold buying binge in the third quarter, adding 57 tons to its total holdings as of 2023.
“The advantages that gold can offer to their reserve portfolios—diversification, downside protection, and liquidity—remain valuable to central banks,” stated Mr. Shaokai Fan, the head of WGC’s global central banks and Asia-Pacific, excluding China.
“It implies that Singaporeans’ economy and currency have additional safeguards against an unpredictable world,” he informed the media.
The central banks that oversee their countries’ currencies, which are susceptible to fluctuations in value based on the perceived strength or weakness of the underlying economy, use gold to diversify their holdings.
Along with government bonds, gold is one of the most important reserve assets in the world since it doesn’t carry credit or counterparty concerns. It is a source of trust in a nation and in all economic circumstances.
The strength of central banks‘ gold purchases exceeded WGC’s projections in its third-quarter trends report, indicating that raising gold allocations is increasingly seen as a prudential move.